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Freeze hits Chinese steel production
Jan 30, 2008
Chinese steel mills are cutting production in response to electricity shortages that are currently plaguing the country. Freezing weather conditions have increased demand for coal and the government is slowing manufacturing activity to ensure sufficient power is available for domestic heating and essential services.
China's state-owned power company, the State Grid, has asked several mills to cut their power consumption. At Ningbo Steel in eastern China's Zhejiang province an electricity pylon collapsed on 28 January, and the mill is currently without power. An official tells Steel Business Briefing the local government is allocating additional supply but returning steel output to previous levels will take 'a long time'.
China's largest electric steelmaker, Shagang in eastern Jiangsu province, closed two 100 t EAFs and will perform maintenance until after the Spring Festival. Rebar and wire rod rolling facilities have been closed too, and officials could not say when power would be restored.
In southern China, weather conditions have not been as harsh, but Kunming Steel says it is running seriously low on raw materials. Transport bottlenecks have intensified due to a combination of heavy snows, higher oil prices and government inspections over truck load sizes. And this problem will only worsen as rail freight shipments are delayed while stretched rail networks are used for carrying passengers during the busy Spring Festival period.
Laiwu Steel in eastern China's Shandong province has also been asked to reduce its energy consumption. "The whole city must cut 200,000 kWh, and we're expected to contribute half of this saving," says a Laiwu Steel official.
China's steel markets are now quiet as buying has reduced in line with slower construction before Chinese New Year. Transaction volumes should pick up by mid-February if the freeze melts but rebuilding already low market and mill inventories may take time, SBB notes.
China shuts down
core steelmaking only
| |
Equipm't shut |
Location; Duration |
| Ningbo Steel |
All |
Zhejiang; unspecified |
Shagang
|
2x100t EAFs, longs |
Jiangsu; unspecified
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| Laiwu Steel |
50t EAF |
Shandong; unspecified |
| Anyang |
100t EAF cut by 30%
|
Henan; unspecified |
| Guangzhou Steel |
80t EAF |
Guangdong; unspecified |
| Lianyuan Steel |
100t BOF + rolling lines |
Hunan; Jan 24 - ? |
| Xiangtan Steel |
3x80t BOF +longs
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Hunan; unspecified |
| Xinyu Steel |
2x40t EAFs rod cut 50% |
Jiangxi; Jan 21 - ?
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| Nanjing Steel |
70t EAF (maintence) |
Jiangsu; Jan - Feb |
By courtesy of: Steel Business Briefing
In addition, make sure to read these articles:
Freeze hits Chinese steel production
China Steel orders fifth continuous caster
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